"The dispute in this case centers around the recited magnetic properties... and their relationship to the claimed [polycrystalline diamond compound]." - CAFC
Today, the U.S. Court of Appeals for the Federal Circuit (CAFC) issued a precedential decision in US Synthetic Corp. v. International Trade Commission (ITC) reversing the ITC's determination that US Synthetic's composition of matter patent claims were directed to a patent-ineligible abstract idea under 35 U.S.C. § 101. The Federal Circuit faulted the ITC for applying Step 1 of Alice/Mayo too narrowly in finding that the disclosed magnetic properties of the compound are side effects of the unclaimed manufacturing process and not physical characteristics of the compound itself.
The ITC instituted a Section 337 investigation into US Synthetic's patent infringement claims back in December 2020 against a series of Chinese entities allegedly infringing claims of U.S. Patent No. 10508502, Polycrystalline Diamond Compound. The PDC of the '502 patent is bonded to a substrate and used as abrasive surfacing for rotary drills while exhibiting reduced leaching of metal catalyst into the PDC once formed. The ITC's administrative law judge (ALJ) overseeing the Section 337 proceeding concluded that, while respondents infringed claims of the '502 patent, and the claims were not directed to a patent-ineligible natural phenomenon, the magnetic behavior of the PDC disclosed by the patent's specification had only a loose causal connection to the claimed diamond grain size and catalyst concentration and thus the claims were directed to the abstract idea of that relationship.
The background of the Federal Circuit's decision details several aspects of the claimed PDC relevant to the present appeal, including that "[m]any physical characteristics of the [diamond table] may be determined by measuring certain magnetic properties of the [diamond table]." The PDC serves as a diamond table for the hard metal composite substrate and several physical parameters of the compound are disclosed by the '502 patent, including magnetic saturation and coercivity. Those parameters indicate quantities of metal catalyst present in the diamond table formed from PDC. Further, the '502 patent discloses that the claimed PCD compound exhibits "a higher coercivity, a lower specific magnetic saturation, or a lower specific permeability... than [diamond tables] formed at a lower sintering pressure."
The Federal Circuit distinguished the present appeal from the Section 101 issues in Diamond v. Chakrabarty (1980), which apply to patents claiming laws of nature and not composition of matter claims. Applying Step 1 of Alice/Mayo, the Federal Circuit found the '502 patent's claims directed to a specific, non-abstract composition of matter. "The dispute in this case centers around the recited magnetic properties... and their relationship to the claimed PDC," the appellate court wrote. Reading the claims as a whole and in light of their specification, the Federal Circuit found that the recited magnetic properties informs a skilled artisan about the PDC's physical characteristics.
The Federal Circuit faulted both the ITC's Section 101 approach as well as the agency's characterization of the claims and specification of the '502 patent. The disclosed magnetic properties satisfy Section 101 because "no perfect proxy is required between the recited material properties and the structure of the PDC." Although the specification says that the physical characteristics "may" be determined by measuring magnetic properties, the appellate court reasoned that the described correlations are concrete and meaningful, not merely speculative.
The ITC found that US Synthetic did not prove that the recited magnetic properties are indicative of a specific microstructure during Section 337 proceedings, but the Federal Circuit determined that this violated the presumption of patent validity codified at 35 U.S.C. § 282. The ITC also relied on several Federal Circuit rulings on Section 101 that are inapplicable to this case as they relate to claimed methods or systems directed to abstract ideas and not compositions of matter. Unlike generic computer functionality, the claimed PDC of the '502 patent is "a physical composition defined by its constituent elements, dimensional information and inherent material properties," the appellate court found.
The intervening respondents to the Section 337 proceedings argued in the alternative that the claims of the '502 patent are not enabled, but this also failed on appeal. At the ITC, this lack of enablement theory was rejected as relying only on attorney arguments that undue experimentation was required to practice the '502 patent's claims. The agency's determination pointed out that the respondents did not cite to or even discuss the undue experimentation factors under the Federal Circuit's 1980 In re Wands decision.
The intervenors argued on appeal that the ITC's determination that the causal connection between magnetic properties and the claimed PDC was "loose and generalized," and that the claimed "unleached portion" broadly claims every process that doesn't include leaching. The Federal Circuit found that the "unleached portion" argument wasn't presented at the ITC and was forfeited, and that the "loose and generalized" language from the ITC's Section 101 analysis wasn't sufficient grounds to disturb the enablement ruling. Finding remaining arguments unpersuasive, the Federal Circuit remanded to the ITC for further proceedings.